Rain Industries broke out of a 7-week Cup With Handle pattern

Rain Industries stock has broken out of a 7-week, 22% deep Cup With Handle. However, the stock is still offering investors an opportunity to get on board as the current price is only 3% away from the ideal buy price of INR 175.

The key trend lines, 10 and 40-week moving averages are at a comfortable position. The current trends of both the averages are upward and the 10-week moving average is trending above the 40-week moving average. The current price of the stock is trading around 10.78% away from the 10-week moving average.

Rain Industries has been an outperforming stock as compared to the broader market. It has a strong Relative Strength Rating of 80. In the last twelve months, the stock has rallied over 168.1% as compared to 60.7% for the Nifty500.

The Relative Strength Line of the stock is offering a lot of encouragement to investors. It has been making good progress in the last four weeks. The overall long term trend of the line is also trending upward. If Rain Industries can maintain this outperformance, it could make sense as a CANSLIM trade.

Rain Industries stock has a strong institutional support. The Accumulation/Distribution Rating of ‘B+’ represents heavy institutional buying over the past few weeks. Although the shares held by institutions dropped in the last quarter, the number of institutions holding the stock increased at the same time. This shows increasing interest among the institutions.

On the earnings front, Rain Industries has an excellent EPS Rank of 90, which indicates consistency in earnings. The earnings and sales for the stock have seen de-growth of -13% and –7%, respectively over the past three years. Its 3-years earnings stability is 24, on a 0 to 99 scale (lower the better). Over the past five years, the earnings and sales for the stock have grown by 8% and 4%, respectively. The 5-years earnings stability is 41. The return on equity for the last reported year is 11%.

The current price of Rain Industries is -6% off from its 52-week high price and 196% above it 52-week low price. The stock belongs to industry group of Mining-Metal Ores, which is exhibiting excellent strength in the current market environment. The current industry group rank is 7.

The stock appears on our idea lists: Trend Template – 5 Months.

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Thyrocare Tech Stock Tries To Clear A Buy Point.

Thyrocare Tech stock is worth watching as the stock is forming a 26-week, 31% deep Cup With Handle Base. The current price is only 2% away from its ideal buy price of INR 1100. Aggressive investors could use any tight area breakout inside the base as an opportunity to initiate a small position. A conservative approach may be to add the stock to your watchlist so that you are ready to pounce if it breaks out to the traditional entry point.

The key trend lines, 10 and 40-week moving averages are at a comfortable position. The current trends of both the averages are upward and the 10-week moving average is trending above the 40-week moving average. The current price of the stock is trading around 12.12% away from the 10-week moving average.

In the last twelve months, Thyrocare Tech has rallied nearly 110.4% as compared to 58.7% for the Nifty500. It has a Relative Strength Rating of 62. We definitely would like to see improvement in the rating. At this point we are taking a step back and focusing on the RS Line.

The Relative Strength Line of the stock is offering a lot of encouragement to investors. It has been making good progress in the last four weeks. The overall long term trend of the line is also trending upward. If Thyrocare Techcan maintain this outperformance, it could make sense as a CANSLIM trade.

On the earnings  front, Thyrocare Techhas an excellent EPS Rank of 86, which indicates consistency in earnings. The sales for the stock have grown by 8% over the past three years; however the earnings growth remained muted at -7%. Its 3-years earnings stability is 14, on a 0 to 99 scale (lower the better). Over the past five years, the earnings and sales for the stock have grown by 14% and 14%, respectively. The 5-years earnings stability is 24. The return on equity for the last reported year is 22%.

The stock belongs to the industry group of Medical-Services. You would still want to see some improvement in the industry group rank for the group. The current industry group rank is 81. The current  price of Thyrocare Technologies -11% off from its 52-week high price and 117% above its 52-week low price.

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Share Market Update: Nifty Breaches 50-DMA And Bank, Auto,Metal Shares Decline

Today’s Action

Nifty, -5.7%; Sensex, -5.9%; Nifty Midcap, -4.4%; Nifty Smallcap, -3.2%; Model Portfolio, +0.7%

Market Pulse Confirmed Uptrend

Weakness in the general market persisted throughout the session. Nifty staged a downside reversal and broke below its 50-DMA (9,778). However, we will not consider today’s move as a distribution day as volume was low compared to Friday’s session. Last week, there were two additional follow-through days. Today, Nifty undercuts low of both the additional follow-through days indicating technical deterioration.

Continue reading “Share Market Update: Nifty Breaches 50-DMA And Bank, Auto,Metal Shares Decline”

Share Market Tips As Nifty Ends Higher in a Volatile Session

Today’s Action

Nifty, +1.1%; Sensex, +1.2%; Nifty Midcap, +1.3%; Nifty Smallcap, +0.7%; Model Portfolio, +0.00%

Market Pulse Confirmed Uptrend

Nifty opened up to solid gains this morning. It remained volatile during the day but managed to closed in the upper half of the day’s range. Banking stocks led the gains today, especially private banks. On the flip side, Nifty Pharma and FMCG were each down 1–2%. Of 2,110 stocks traded, 985 advanced, 807 declined, and the remaining traded flat.

Our primary indicators remain healthy as the distribution count is zero and leaders are acting reasonably well. Yesterday, distribution day count was down to zero as Nifty rallied 5% from the last distribution day that occurred on April 15. We remain in a Confirmed Uptrend and are open to increasing risk selectively in quality names coming out of proper bases.

Though distribution day is a primary indicator of market weakness, one should also keep a check on other indicators. When in a Confirmed Uptrend, it is an anomaly to see heavy volume with no upward price progress and if we see clusters of this activity we suspect that the momentum may have shifted.

Currently, picking up the stock from a sector as a whole in positive momentum becomes important. Group rank feature can be very helpful. Look for stocks that are among the top 40 groups and show improvement in rank. It has been observed that what is breaking out of a proper base and among top group rank is working well. It is also important that investors don’t play all their cards at once. In our portfolio, we are skewed toward Pharma and Chemical stocks. In the last few days, we had a decent amount of quality leaders in these sectors trading through justifiable entry points.

We would suggest adopting an investment approach where you begin with a small allocation and increase it as and when the market advances further. Without trying to predict and decode stories, we will take what the market gives us and continue to monitor unfolding conditions.

Key News

Axis Bank: The board approved the acquisition of 29% stake in Max Life Insurance. The stock closed 6.5% higher.

Jk Paper: The board approved the buyback of equity shares at a price not exceeding Rs 130 per share and for an amount not exceeding Rs 100 crore. The stock advanced 4%.

T V S Motor: The company approves issuing NCDs up to Rs 500 crore on a private placement basis. The stock closed 1% lower.

Natco Pharma: The company gets USFDA approval for its first sANDA product from its new drug formulations facility in Visakhapatnam. The stock closed 1% lower.

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Nifty escapes Distributions; ends below 9000

Today’s Action

Nifty, -3.0%; Sensex, -3.2%; Nifty Midcap, -3.1%; Nifty Smallcap, -3.8%; Model Portfolio, 0%

Market Pulse Confirmed Uptrend

Indian markets reacted sharply to the global cues after prices of WTI crude crashed and landed in negative territory for a while. Nifty gapped down around 250 points and traded sideways in the first half of the day’s session. Post noon, it was a cup-shaped trading session as buyers outweighed sellers. 84% of Nifty50 stocks declined today, led by Indusind Bank (Nse) (-12.3%) and Bajaj Finance (-9.1%). On the flip side, Dr Reddys Labs. (Nse) (+4.4%) and Bharti Infratel (+2.3%) were the major advancers. 

Nifty escaped distribution as today’s volume was slightly lower than that of the previous session.

Barring Nifty Pharma (+2.5%), all the sectoral indices closed lower. Nifty Pvt Bank (-5.9%), Bank (-5.4%), and Nifty Auto (-5.3%) were the major decliners. Nifty Metal and Media indices closed more than 5% lower. Of 2,115 stocks traded, 495 advanced, 1,311 declined, and the remaining traded flat.

We continue to be very selective about taking any fresh positions. It is important that investors don’t play all their cards at once. We would suggest adopting an investment approach where you begin with a small allocation and increase it as and when the market advances further.

Without trying to predict and decode stories, we will take what the market gives us and continue to monitor unfolding conditions. Stocks with higher relative strength and superior fundamentals can do well. Some leading stocks have sharply corrected. Wait for them to put in at least a short period of consolidation and show a constructive breakout from that range. Buying without this period of constructive behavior into a straight upmove off the bottom, puts you at a risk of drawdown.

Key News

Icici Bank The stock declined sharply after reports of $100M exposure to Ocean Tankers, a unit of Singapore oil-trading firm Hin Leong Trading.

Morepen Laboratories: Its shares hit an upper circuit after the company received license to manufacture Hydroxychloroquine from Himachal Pradesh State Drug Controller.

IT stocks came under pressure as the U.S. President tweeted about plans of temporary suspension of immigration.

Aurobindo Pharma The USFDA classified its unit IV of Hyderabad as voluntary action indicated (VAI).

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Disclaimer: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. It is for educational purposes only.